ThyssenKrupp Posts First Annual Profit in 3 Years

ThyssenKrupp, the German steel maker and industrial conglomerate, reported its first annual net profit in three years on Thursday. And in an apparent sign of confidence, the company proposed paying a small dividend of 11 cents a share for the first time in three years.

ThyssenKrupp, which is based in Essen, said that net income for the financial year ended Sept. 30 was 195 million euros, or about $244 million, compared with a €1.6 billion loss in the previous year. Sales were €41.4 billion. Earnings before interest and taxes, a metric that financial analysts watch closely, more than doubled to €1.3 billion.

Heinrich Hiesinger, who became chief executive in 2011, has been trying to turn the company around after three years of large losses that were mostly because of huge steel investments in Brazil and the United States. Mr. Hiesinger has sold money-losing or marginal businesses, and tried to reduce the company’s dependence on the steel industry, which is subject to sharp fluctuations depending on the economic cycle.

He is trying to focus the company on businesses including components like steering systems for automobiles, wind turbines, elevators and factory design, which he thinks have steadier growth prospects. These three units increased earnings before interest and taxes by 13 percent to €1.76 billion in the company’s financial year.

“It is still a work in progress, but I think they are, bit by bit, turning this company around,” said Jeff Largey, an analyst at Macquarie in London.

The company lost €47 million in the latest quarter. Excluding divestments, ThyssenKrupp also paid out about €250 million more than it took in during the year, largely because of pension obligations.

Mr. Hiesinger, whose contract was extended on Wednesday until 2020, recognized that the turnaround was not yet complete, but said, “We have demonstrated that we are making progress with our transformation into an efficient and profitable diversified industrial group.”

Some analysts questioned the wisdom of paying a dividend while the company continues to pay out more money than it is earning. The company said it aimed to break even on overall cash flow before divestments next year.

The company also said that it expected earnings before interest and taxes to increase 15 percent next year, to at least €1.5 billion, despite the tough economic environment. In a note to clients on Thursday, analysts at Citigroup said this forecast was likely to disappoint investors, who had been expecting higher growth.

ThyssenKrupp shares closed up more than 2 percent in Frankfurt.

Mr. Hiesinger said that the proposal to resume paying a small dividend was “no more than a signal to our shareholders.”

ThyssenKrupp last paid a dividend, of 45 cents, in the fiscal year that ended in 2011. Paying a dividend may be a gesture to one of the company’s important shareholders, the Krupp family foundation, which has a stake of about 23 percent and for years exerted much influence on decision-making at ThyssenKrupp.

The loss of the dividend has reduced the foundation’s ability to fund its activities, company insiders say. The foundation declined to participate in an €880 million capital increase last year, leading to a dilution of its holding by about 2 percent of the company.

In an indication of changes at the company, ThyssenKrupp on Wednesday published a list of candidates proposed for election to the supervisory board in January. The foundation’s number of seats will be reduced to two from three because of its smaller stake. Jens Tischendorf, a partner in Cevian Capital, an activist hedge fund that now holds about 15 percent of ThyssenKrupp, was proposed for a board seat. Cevian Capital buys stakes in companies that it believes are undervalued, and it has so far backed Mr. Hiesinger.

ThyssenKrupp also said on Thursday that it would start issuing stock in the United States through American depositary receipts, instruments that make it easier for investors in the United States to buy into foreign markets. The company is listed on the Frankfurt and Düsseldorf stock exchanges, and Deutsche Bank will be the depositary bank for the stock in the United States. “This makes it easier to invest in ThyssenKrupp,” the company said.